The Italian government’s credit rating has been slashed by Moody’s from Aa2 to A2 with a negative outlook.

The ratings agency blamed a “material increase in long-term funding risks for the euro area”, due to lost confidence in eurozone government debts.

To anyone with any sort of engineering background this is as clear example as it is possible to have of a positive feedback loop leading to hunting oscillation. And the answer in this case is equally clear – break the loop and then, if it is certain that controlled feedback has some value, remake it with some appropriate hysteresis in place.

Breaking the loop means simply shutting down the ratings agencies – any useful purpose they may once have served is now vastly outweighed by the damage they are doing through providing this feedback mechanism. I would suggest also simply banning short selling for a period – this too is clearly a major contributor to hunting oscillation. Once the markets have reached a more stable state, and after a period of careful thought, then some elements of positive feedback could be reintroduced, with appropriate regulatory controls.

Sadly, with governments staffed by lawyers and under the sway of the gambling bankers I fear this is unlikely to happen. It’s a great shame that there aren’t sufficient people of a rational scientific or engineering background in government.

I was surprised, and not a little saddened, to read the racist views of Alvin Sallay in the SCMP on Sunday when writing about the Hong Kong ladies cricket team:

Godiva is one of nine Chinese girls in the 15-strong women’s squad. The rest are non-Chinese, but all are united in the fact that they qualify for the games by being born in Hong Kong and holding SAR passports.

This is a quite outrageous sentiment. People who are born in Hong Kong and are citizens of China holding Hong Kong passports must be “Chinese”. What else could they be?

With thanks to Bruce Schneier for highlighting it in his blog, I must recommend this essay by Tom Engelhardt for getting to the essence of the US Government’s “management by fear” approach to terrorism. Sadly, many other governments seem to follow their lead.

On viewing the plans for the new Legco accommodation (in part of what used to be the beautiful Victoria Harbour) Emily Lau commented “I think it’s better sound-proofing the room because it will be disturbing if there are protests outside”.

I don’t normally indulge in meta-blogging (blogging about bloggers) on the grounds that it could easily lead to disappearing up my own (rather sizeable) fundament. But I’ll make an exception this once, Read the rest of this entry »

There are so many issues raised by the case brought against a self-proclaimed Taoist practitioner accused of duping a young model into having sex, and by the verdict and judgement delivered against him, that it is difficult to know where to start. But there is no doubt in my mind that the Hong Kong legal system (normally so sound) has made a complete ass of itself in this case.

Hemlock, in an excellent post yesterday, highlighted that the people cosying up to and riding on the coat tails of the property cartel tycoons include a fair few gweilos, one such being Mr Rory O’Grady, on whose toadying and self-interested letter to the SCMP Hemlock commented. Read the rest of this entry »